The Dow lagged the broader U.S. stock market on Wednesday, as investors sifted through the transcript of the Federal Reserve’s latest policy meeting, which offered very little in terms of new information or catalysts to jumpstart the next leg of the equities recovery.
Dow Lags as Nasdaq and S&P 500 Creep North
The Dow Jones Industrial Average traded in a narrower range on Wednesday, reflecting a tepid pre-market session for U.S. stock futures. At the time of writing, the blue-chip index was down 37 points, or 0.1%, at 26,113.35.
Only about a third of the Dow 30 index members had reported losses. Dow Inc. (D) was the biggest loser, falling 1.9%.
The broad S&P 500 Index of large-cap stocks edged up 0.1% to 2,881.71. Seven of 11 primary sectors reported gains, led by energy. On the opposite side of the ledger, materials and utilities both lagged the broader market.
Meanwhile, the technology-focused Nasdaq Composite Index climbed 0.3% to 7,936.36.
Fed Maintains Status Quo
The Federal Reserve’s dovish pivot was cemented at last month’s policy meeting, as officials continued to stress patience with respect to future interest rate adjustments, according to the minutes of the March 19-20 gathering in Washington. Officials said what they were supposed to say – namely, that their views on monetary policy could change based on incoming economic data.
“Several participants noted that their views of the appropriate target range for the federal funds rate could shift in either direction based on incoming data,” the minutes, which were released at 2:00 p.m. ET, said.
Officials are confident that the U.S. economy isn’t heading for recession anytime soon even as the picture abroad continues to worsen. Earlier this week, the International Monetary Fund (IMF) slashed its estimate on global economic growth to reflect the weakest pace of expansion since the 2009 financial crisis. The IMF now sees the global economy expanding just 3.3% in 2019 before picking up slightly to 3.6% in 2020.
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The Federal Reserve indicated last month that it will not raise interest rates in 2019, a clear admission by policymakers that they misjudged the previous tightening cycle. Rates were raised four times last year, and the last upward adjustment in December pushed stock markets deeper into the abyss. By Christmas, the S&P 500 and Nasdaq had entered bear markets.